Can Car Insurance Companies Actually Do These?

By Lucy FisherPublished: Friday, November 6th, 2009

There are many stories spreading across the internet and through word of mouth about car insurance. Some can be pointed out to be facts, some can also be a bent form of a truth and others are just straight out myths. How do we know which is true and which is not? Here are a few of those myths that have been circulating around most recently and their explanation.

All I need is to pay minimum car insurance for legal purposes.

Although it is possible to pay only the minimum amount of insurance, it may very well not be worth it. Do you know the saying you get what you paid for? Well this setting could not explain that anymore better. If you are paying insurance strictly to comply with the law, that’s what you will get and nothing else. Many minimum insurance requirements will not be enough to cover all costs of your vehicle damage or medical bills in the event of an accident. Remember that the less insured you are, the more vulnerable you are to loosing your assets.

The accident was caused by someone else driving my car. It’s not my fault and I won’t be held responsible.

Although that usually is the case, there can be times when you will be held financially responsible for an accident even if you were not behind the wheel at that time. Many states consider the vehicle covered to be the primary insurance which means that the insurance company will pay for the damage caused by the vehicle. But if the vehicle is underinsured or uninsured, the damages will then be paid by the drivers insurance. Different states have different policies regarding this and it is best to inquire about this scenario in your area.

A cheaper car will cost less insurance

First off, we have to define what a cheaper car is. Remember that older cars that are for sale at second hand auto shops are cheaper than brand new cars. But this does not necessarily mean that the insurance will be less. Older cars, especially ones bought from used-car salesmen have a higher mileage and older year than many other of the new models and will have a higher chance of breaking down. In fact, there are some cases where your insurance would probably cost more than what you paid for the car! The type of car is usually more important than the price and factors for calculating insurance rates are found underneath the hood of your car such as it’s engine, model, year etc. however cheaper cars give you a lower payment in comprehensive coverage.